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Sunday, June 7, 2020  Spokane, Washington  Est. May 19, 1883
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News >  Business

Dow falls to below half its record high

By Tim Paradis Associated Press

NEW YORK – Wall Street ended another unforgiving month with a steep loss – one that left the Dow Jones industrial average at less than half its record high.

The day’s news unsettled investors. Citigroup Inc. agreed to turn over a big piece of itself to the government, a move that fanned worries that other banks would face crippling trouble with bad debt. General Electric Co. slashed its quarterly dividend by 68 percent. Both companies are part of the Dow Jones industrial average, which fell 119 points.

And the government’s gross domestic product report showed that the economy fell at a 6.2 percent annual pace at the end of last year, much faster than expected.

For investors, it all added up to a prolonged and increasingly painful recession.

“I don’t think there is the confidence that the recovery is going to happen very quickly. It’s going to take time,” said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.

The Dow closed the week down 302.74, or 4.1 percent, at 7,062.93. The Standard & Poor’s 500 index fell 34.96, or 4.5 percent, to 735.09. The Nasdaq composite index fell 63.39, or 4.4 percent, closing at 1,377.84.

The Russell 2000 index, which tracks the performance of small company stocks, declined 21.94, or 5.3 percent, to 389.02.

The Dow Jones Wilshire 5000 Composite Index – a free-float weighted index that measures 5,000 U.S. based companies – ended at 7,415.60, down 386.67, or 5 percent, for the week. A year ago, the index was at 13,945.130.

Some analysts said the market’s slide could have been worse – the major indexes finished well above their lows.

Dan Cook, senior market analyst at IG Markets in Chicago, said Wall Street’s ability to show some recovery Friday despite the onslaught of bad news is a good sign.

“We have become somewhat callous to these news announcements,” he said.

Nonetheless, the market’s stats once again showed how troubled Wall Street and the economy are:

•The Dow, at its lowest close since May 1, 1997, is now down 50.1 percent from its record high of 14,164.53 reached in October 2007. It came within 34 points of 7,000, a level it hasn’t fallen below since October 1997.

•The Standard & Poor’s 500 index breached its Nov. 21 trading low of 741.02, which came during the height of the credit crisis. Friday’s finish was the lowest for the index since Dec. 18, 1996.

•The Dow’s 11.7 percent loss in February was its worst since 1933, when it fell 15.6 percent, and its sixth straight monthly drop. The half-year slide totals 38.8 percent, the worst since 1932, when it fell 45 percent.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 46 cents to settle at $44.76 a barrel on the New York Mercantile Exchange.

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